President Cyril Ramaphosa has said support initiatives aimed at the South African defence industry are bearing fruit, with positive spinoffs for the South African National Defence Force (SANDF).
Ramaphosa, who is also Commander-in-Chief of the SANDF, made the remarks during Armed Forces Day in Polokwane on 21 February.
“We have to continue growing our defence industry, especially as it makes a significant contribution in the country’s economy,” he said.
“To strengthen the relationship between the defence industry and the armed forces, we have launched the National Defence Industry Council. This development aims to support the defence industry with export opportunities while also meeting the SANDF’s material needs.”
The National Defence Industry Council (NDIC) was launched by the Minister of Defence and Military Veterans NosiviweMapisa-Nqakula in March 2016, with the Council chaired by the Secretary for Defence. The NDIC consists of senior government officials, captains of industry and industry body AMD. It has been tasked with developing a Defence Industry Strategy and a plan for implementation to develop and transform the industry. The NDIC will help assist the local defence industry to develop a footprint in the global defence market, while creating jobs and growing the economy. The NDIC will also help to build a strong skills base in the sector locally. The council aims to ensure the defence industry is optimally used in all defence capital acquisition programmes of the SANDF and other security agencies.
“We have also launched the Defence Industry Fund, with the objective of growing the local defence industry and servicing the SANDF and external clients,” Ramaphosa said.
The Defence Industry Fund (DIF) was launched in July 2018 to raise and deploy capital for the defence industry. The defence industry has high barriers to entry, a need for secrecy and difficult access to funding, prompting the establishment of the fund, which is managed by privately held Crede Capital Partners. The fund aims to attract R1 billion in investment, with possible investors including the Eskom Provident Fund, Telkom Retirement Fund, Public Investment Corporation etc. The Fund aims to grant loans up to a maximum of R50 million, with a focus on small and medium sized companies. It also aims to provide financial help for local firms going into joint ventures with international companies. Progress has been slow and nearly a year after the Fund’s launch, Crede had not yet issued a loan as it was still raising capital independently as there is no seed funding available from government. Capital funding is being sought both locally and internationally.
During his speech, Ramaphosa said, “we are starting to see the fruits of this intervention in our military,” but he did not elaborate on this.
“Our Armaments Corporation, Armscor, is also integrally involved in these processes and continues to provide major acquisition and project management capabilities,” the President said.
“South Africans should be proud that their military is providing opportunities to small businesses and contributing to the stimulation of local economies where bases are situated. This we have done through Project Koba-Tlala,” Ramaphosa said. This aims to develop the rural economy and locally source food for SANDF personnel, amongst others.
Ramaphosa added that, “the SANDF has entered into a Memorandum of Understanding with the Department of Small Business Development to raise the department’s spend on small and medium enterprises from 30% to 50%, and create a lifeline for start-ups and budding entrepreneurs.
“I challenge you to ensure that women-owned businesses access a significant chunk of this procurement in line with the call by the African Union for the allocation of at least 25% of public procurement to women-owned businesses, instead of the current 1%.”
In his speech, Ramaphosa praised the SANDF for carrying out tasks such as border protection, with soldiers patrolling 4 800 kilometres of border “despite limited numbers”. He said the companies deployed along the South Africa border with Zimbabwe, Botswana and Mozambique continue to make great strides in curtailing illegal actions in their areas of responsibility.
“These men and women do remarkable work in safeguarding our borders and in assisting the South African Police Service with crime prevention,” Ramaphosa said of SANDF personnel. “We commend them, knowing that the vast stretch of our border requires far more resources on the ground.”
“As a nation, we owe a great debt of appreciation to our National Defence Force for being not just a fighting force, but a developmental force. Across our country, we have seen the SANDF render essential services through the deployment of health professionals at public health facilities that are in crisis.
“We have seen our men and women in uniform repair sewage infrastructure along the Vaal River and in the North West.
“Our forces have built bridges in rural areas to give isolated communities access to places and services they would not be able to reach otherwise.
“And our forces are active in fire-fighting as well as mountain and maritime search-and-rescue operations.
“Let us continue serving this country loyally, and redouble our efforts to ensure that South Africans feel safe and remain safe,” the President concluded.